AMERICA’S PLIGHT

Taranaki Daily News, 2 September 1933, Page 6

AMERICA’S PLIGHT

WHAT NATION HAS SUFFERED RUIN AND ECONOMIC DESOLATION. OVER 15 MILLIONS UNEMPLOYED. ROOSEVELT’S STUPENDOUS TASK. (By T.C.L.—No. 3.) America is fast making history. With the greatest confidence and eclat, with no hesitancy or foreboding, it has recently launched bn its troubled economic waters argosy after argosy, and the world, now that it has recovered its breath, is wondering whether they will return to haven safely or strike snags bn their voyages and be wrecked and the country along with them. , . Let it be said at once that America as a whole views the “New Deal” proposals, revolutionary in form and principle as many of them are, with favour, almost with enthusiasm, and if they fail it will not be for lack of support and interest on their part. Already they have achieved the primary object, the restoration of confidence from which the United States, more than any European country, was suffering as a result of three and a-half to four years of the acutest depression, with its accompanying unemployment, financial losses and human suffering and despair. How terribly hit by the economic blizzard was America the world has not fully : realised. No one can realise it unless one has been there oneself and obtained first-hand unbiassed information. The unemployment figures, for instance, were never given out officially. The Government was afraid to alarm and further depress the public. And so it kept back the stark fact that one-third of the workers of the nation were unemployed, or over 15,000,000 in all. It is difficult to envisage what that meant. Over 15,000,000 people and their dependents to provide for 4 That was the desperate position confronting the country at the end of the past winter in March. Multiply the present number of unemployed in this Dominion by three and you have in proportion to population America’s terrible problem. NO SYSTEMATIC RELIEF. There was no systematic form of relief for the unemployed in America as in Britain and New Zealand. They had to be cared for by those in work, and it is to their credit that the latter did their duty to the fullest extent of their ability. But there was a definite limit to what they could do in alleviating the hunger and distress of their fellows. The States were appealed to and they responded by raising taxes and money for giving employment and granting relief. But the limit of what they could raise by taxation was also soon reached. They then appealed to the Federal Government' for support. It had become a national matter. The crisis was extending, the people were suffering keenly, lawlessness had broken out in some of the rural States, a judge responsible for issuing eviction orders had been almost lynched, the forbearance and temper of the people had been stretched to the limit.

It was clear that something must soon happen or there would be a collapse of the entire financial, economic and social systems of the States that had been built up since its waves of people had swept out ever westward and southward and peopled its illimitable rich lands and exploited its wonderful natural resources and established and developed its marvellous industries. Or there might have been an outbreak of Bolshevism. The people had had a rude awakening. Materialism had held full sway; the accumulation of wealth had been everything to them; success had been measured in terms of money, not of real personal worth; the simple virtues and the real values of life had. ceased to be factors that counted with the great masses of the people. • For generations the Americans, challenging the old practices and conventions, had been building a great, nation. They had experienced no check since the Civil War in the sixties. Nature had been exceedingly bountiful in its distribution of its largesse, for no country was so richly endowed with everything that goes to make a nation materially great and prosperous. Many of its people had left the old lands, with all their social and physical inequalities and inhibitions, to seek fortune in the New World, and they soon found it as a reward for their industry, efficiency and ability. All sections of the community shared in the general prosperity. The standard of living was raised ever higher and higher, and the future was regarded as absolutely assured. Confident, sometimes self-assertive and arrogant, they were never surer of themselves and tiieir appointed destiny—up till 1929.

DARKENING SHADOWS FALL.

Then darkening shadows began to fall. Orders for products of farm and factory decreased. Europe, hamstrung by the payment of war debts, found itself unable to buy the surplus goods Americahad to offer. The markets sagged and sagged. The stock exchange bubble burst, throwing the tens of thousands of speculators into a state of consternation. Fear began to spread and soon-possessed the whole nation. Everybody stopped buying all but necessities, all resources were husbanded, all the reservoirs of wealth rapidly dried up. Factory after factory closed its doors; factory after factory reduced its personnel to the lowest limits. The weaknesses in the body economic began to show themselves, and the marginal enterprises collapsed with a loud, resounding crash. Firms whose stability was regarded as undoubted and unassailable fell in the general collapse. Millions of employees were thrown out of work, and countless men and women became human derelicts. Then was precipitated the bank failures. There were over 22,000 banks in America, as against five in Britain, four in Canada and six in New Zealand and Australia. American policy has been opposed to bank amalgamation and combination. Since the days of President Andrew Jackson the people have been distrustful and suspicious of the New York financial houses—and recent disclosures show they have good reason for their apprehension. They have preferred their own banks, managed by their own people in their own States and towns; hence the large number of small independent banks. But the banks did not observe the strict rules of banking and the safeguarding of their depositors’ funds as the laws of Britain and British dominions insist upon. They were affected by the same virus as their customers—they wanted to get rich quickly. Accordingly they indulged in all forms of speculation, and when the crisis came they were caught and their customers lost the whole or a large proportion of their deposits. The farming community suffered terribly. Like their brethren in New Zealand, they made no provision for the rainy day. In times of prosperity they added to their holdings and mortgaged their old farms to pay for them. They brought a new model motor-car every season, they sent their children to expensive secondary schools, they had their wireless sets and frigidaires and other facilities and amenities. Then they saw their homes swept away as in a flood, all their lifetime work and savings gone

over-night. They, too, were relegated to the unemployed scrap heap, until many of them turned on the financial houses and other mortgagees. But that is another story. WIDESPREAD COLLAPSE. Homes in the towns were lost by tho same means as wages decreased or disappeared. Dividends ceased to be paid and securities became worthless. School teachers could not be paid 'in many towns; public schools were reduced and private schools closed. Social club life became a thing of the past, and many who had maintained a comfortable scale of living considered themselves , lucky to have enough money with which to buy food. Motor-cars in their millions were laid up, and those associated with the great motor industry—petrol companies, service stations and garages—were either considerably reduced in turnover or wiped out altogether. The great Detroit motor works found themselves without sufficient orders to maintain even skeleton staffs and pay the overhead charges. Movie shows closed up in their thousands, and picture producing companies, with their tens- of millions of capitalisation, crashed, leaving nothing but financial desolation in their wake. In reviewing conditions that existed two months earlier than his administration began President Roosevelt said that the country was dying by inches. “It was dying,” he proceeded, “because trade and commerce had declined to dangerously low levels; prices for basic commodities were such as to destroy the value of the assets of national institutions, such as banks, savings banks, insurance companies and others. Those institutions, because of their great needs, were foreclosing mortgages, calling loans, refusing credits. Thus there was actually- in process of destruction the property of millions of people who had borrowed money on that property in terms of dollars, which had air entirely different value from the level of March, 1933.” The picture is not complete—it could not adequately or realistically be described, as the canvas required would be so large—but it may give New Zealanders some idea of the condition to which America was reduced before President Franklin Roosevelt was called to the helm of State. He could have no better material to work on—the people of a great country disheartened, disappointed, disillusioned, embittered and desperate.